CBS CBS Corp

By Joe Flint 

Viacom Inc. Chief Executive Philippe Dauman and George Abrams, a director at the media giant, filed a lawsuit against Vice Chairman Shari Redstone, challenging their dismissals as stewards of $40 billion media empire built by her father Sumner Redstone.

The lawsuit, filed Monday in Massachusetts probate and family court, seeks to invalidate their removal from a seven-member trust that will oversee Mr. Redstone's nearly 80% voting stakes in Viacom and CBS Corp. when he dies or is incapacitated. It also seeks their reinstatement as directors of National Amusements Inc., the company that holds those controlling stakes.

Messrs. Dauman and Abrams were informed of their dismissals late Friday by a lawyer claiming to represent the mogul. They quickly contested the legitimacy of the move, questioning the lawyer's relationship to Mr. Redstone.

In the complaint, Messrs. Dauman and Abrams accused Ms. Redstone of being behind the changes to the trust and taking advantage of her ailing, 92-year-old father to make a power play to assume control of his media holdings.

The mogul's "multibillion-dollar businesses have been seized by an estranged daughter who has manipulated her father to achieve her goals," the suit charged.

A spokeswoman for Ms. Redstone didn't immediately respond to a request seeking comment about the lawsuit. An earlier statement issued on Ms. Redstone's behalf denied that she has taken advantage of her father. "It is absurd for anyone to accuse Shari of manipulating her father," the statement said.

The complaint included sobering claims about the state of Mr. Redstone's health. It claimed he is in "the grip of a neurological disorder" characterized by conditions such as dementia, impaired cognition and memory loss, and that he is "unable to initiate or participate in meaningful conversation."

Robert Kleiger, a lawyer for Mr. Redstone, filed a petition on the mogul's behalf Monday in a Los Angeles court seeking to validate the removals of Messrs. Dauman and Abrams. The petition said no court has made a determination that Mr. Redstone lacks capacity and no such medical evidence has emerged.

In place of Messrs. Dauman and Abrams, the trust is expected to tap Thaddeus Jankowski, a senior vice president and general counsel of National Amusements, and Jill Krutrick, a financial analyst, people familiar with the matter said. Both are close to Ms. Redstone. In addition, Ms. Redstone's daughter Kimberlee Ostheimer is expected to be tapped for National Amusements's board of directors.

The complaint alleged that those expected appointees are under Ms. Redstone's control and "will illegitimately tip the balance of power to her" when control of the Redstone media empire shifts to the trust.

As infighting goes on in Viacom's upper ranks, the company is trying to turn around its business, which includes well-known cable TV brands like MTV, Nickelodeon and Comedy Central. The stock price is down 40% over the past year.

The company has been looking to sell a stake in Viacom's movie unit Paramount Pictures by June.

This is the second time in a month that a court will be asked to determine Mr. Redstone's mental capacity and whether he has been under undue influence of those around him.

Earlier this month, a Los Angeles judge dismissed a suit brought by Manuela Herzer, a former girlfriend and companion of Mr. Redstone who argued he was mentally incompetent last fall when he evicted her and removed her as his health-care agent.

Mr. Redstone provided a taped deposition in that case where he struggled to communicate and recall basic facts but also made clear a disdain for Ms. Herzer. The judge dismissed the suit without ruling on Mr. Redstone's mental competence. After that case was dismissed, Ms. Herzer followed up with a suit against Ms. Redstone, alleging undue influence over Mr. Redstone.

In an affidavit in the Ms. Herzer case last fall, Mr. Dauman described Mr. Redstone as "engaged and attentive." But in the complaint Monday, Mr. Dauman said that in the earlier affidavit, he "made no observations about Mr. Redstone's capacity to make significant business decisions."

He added that he visited with Mr. Redstone in March and the mogul was "almost totally nonresponsive, and could not meaningfully communicate at all." Mr. Redstone's deposition in the Ms. Herzer case "demonstrated a severe loss of comprehension and a seriously diminished mental capacity, " Monday's suit said.

The often bad relationship between Ms. Redstone and her father also is detailed in the suit as proof that it was never his intention to leave her control of his assets.

"Shari had various roles at [National Amusements], Viacom, and CBS, but ultimately did not meet her father's high standards for managing those businesses," the suit said.

--Joann S. Lublin contributed to this article.

Write to Joe Flint at joe.flint@wsj.com

(END) Dow Jones Newswires

May 23, 2016 13:29 ET (17:29 GMT)

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